Socialism for the rich

October 05, 2006|By Thomas Sowell

Although socialism has long claimed to be for the poor, it has probably done more damage, on net balance, to the poor than to the rich. After all, the rich have enough money to leave the country if they think the socialists are going to do them any serious harm.

Some of our own rich have already had their money leave the country, to be sheltered from the higher taxes that limousine liberals say we should all pay. Meanwhile, the liberal media give them kudos for their selfless advocacy of higher taxes on higher-income people, forgetting that these are not taxes on wealth.

Most of the people in the upper income brackets are not rich and do not have wealth sheltered offshore. They are typically working people who have finally reached their peak earning years after many years of far more modest incomes - and now see much of what they have worked for siphoned off by politicians, to the accompaniment of lofty rhetoric.

The rich have learned to adapt socialist policies to their own benefit. For example, the city of Riviera Beach, Fla., is planning to demolish a working-class neighborhood under its power of eminent domain in order to prepare the way for a marina for yachts, luxury condominiums and an upscale shopping district.

What will the city of Riviera Beach get out of all this? More taxes from higher-income people, enabling local politicians to spend more money on programs to attract votes.

Meanwhile, the rich get rid of lower-income folks without having to pay them the value of their homes and businesses that will be demolished. As in so many other cases, eminent domain is socialism for the rich.

Theoretically, those whose homes and businesses are demolished will get the "just compensation" to which the Constitution says they are entitled.

In reality, just announcing plans to demolish the homes in an area will immediately demolish part of their market value. Even if homeowners are compensated for whatever value remains when their homes are actually demolished - which can be years later - they have still been had.

For businesses, compensating them for the value of their physical assets - which may or may not include ownership of the place where their businesses are located - does nothing to compensate them for the often much larger value of the clientele they have built up over the years but who are now scattered to the winds by neighborhood demolition.

This game doesn't work the same way in rich neighborhoods. Not only can the rich hire big-bucks lawyers to fight city hall, but why would city hall want to get rid of upscale taxpayers, who are often also big donors to political campaigns?

A very different form of socialism for the rich protects their communities from even the dangers of a free market. A whole array of laws and policies prevents outsiders from buying up property near them, even when these outsiders are ready to pay prices determined by supply and demand rather than by eminent domain.

For example, the "open space" laws that have spread across the country to protect upscale communities represent one of the biggest collectivizations of land since the days of Josef Stalin.

Upscale residents say that they have a right to protect "our community." But not even the rich own the whole community. They own what they paid for - their own individual property. But they get the government to collectivize the often vastly larger surrounding property, in order to keep the unwashed masses from settling near them and spoiling their views.

Moreover, they wrap themselves in the mantle of idealism while doing this and denounce the "selfishness" of those who would stoop to building homes or apartments to house others, just to make money.

"Developer" is a cuss word to those who wax indignant in their righteous zeal to keep other people out. Why can't these money-grubbing developers just inherit money, like so many of the upscale idealists?

Thomas Sowell is a senior fellow at the Hoover Institution at Stanford University. His column appears Thursdays in The Sun. His e-mail is info@creators.com.